I apologize if this was discussed in the past but most of the threads I saw actually discussed Branch Staff who actually work with the members beyond the initial inquiry by the member (contacting with answer, issueing disclosures, closing loans).

So my situation is this :

We are a small credit union with just 2.5 branches. Being small we have trained our front end branch staff to explain our Home Equity Line/Loan products and take a basic paper application.

At that point the branch staff washes their hands of the loan. From then on out it is handled by myself and another individual. We approve the loan, negotiate the actual terms, process and close the loan.

Would our branch staff need to be registered as MLOs? I mean technically they do take an application but they dont really negotiate terms. Its not much different than handing them a rate sheet and a paper application.

If they don't meet the "negotiates terms" definition of the Act (and from the information provided, it doesn't sound like they do), then they wouldn't need to be registered. Remember that "negotiating terms" includes even providing TIL disclosures, so if they aren't doing that, they should be ok.

My question is always, how are rates being communicated???

Usually HE loan products have pretty inflexible fixed pricing schedules and schemes. If they are also discussing rates with the member, then I would say you have met the negotiating terms test as well.

Persoanlly, I would never apply for a loan without knowing the possible rates and terms up front. Are you saying that your frontline staff NEVER discuss or quote rate off a rate sheet ever?

Raitchjay - Thats what I was thinking. Their role seemed almost administrative.

Jay - They do discuss the rates from the rate sheets but we also do Risk Based Pricing. So the rates being quoted at application are subject to change upon approval.

I guess for me, quoting a possible rate and payment from a rate sheet is not negotiating terms (any human being can look at a rate and do a payment calculation). Its the negotiation of actual terms of the loan after approval and issueing disclosures is what the Act seemed to be getting to.

How often do they actually change? How much actual 'negotiation' goes into HE loans?

IMO, banks that hang their hats on this fine of a line in the sand will be in for a rude awakening on your next examination. JMO.

Also, rememer that if they are handing out HELOC apps, they are also (or should be) handing out the HELOC early disclosure with it...in effect they just negotiated/communicated/offered loan terms per the rule. You may want to change some duties around and maybe just have the customer speak with the MLO directly, having your branch staff refer them to the MLO and not hand out the apps.

You can always manage who talks to the member and "guides" them in the process. You will not get away with someone not being an MLO from app giving to closing. Someone has to be negotiating or in my terms guiding the customer/member to the loan product. My opinion, if in doubt on a couple of employees, get them registered. It is truly not a big deal.